Because of the legal status of marijuana and THC as Schedule 1 narcotics, cannabis-related businesses typically encounter obstacles with funding and financial operations. Since banks are unwilling to accept the risk of working with them, most MRBs are unable to receive financing going the traditional route.
However, even if you can’t receive a bank loan, there are other paths to obtaining operating capital. Cannabis lending companies can make it available to you. To make sure you partner with a dependable non-bank lender, double-check all terms and conditions beforehand. Read on to learn what questions to ask your lending company and gain a competitive edge in the rapidly expanding cannabis industry.
What should I ask when choosing an MRB lending company?
Knowing where you stand before you commit to a loan is very important. If you’ve already worked out a business plan, you know exactly how much and how soon you need the funds and how you’re going to invest them. Now you have everything you need to discuss further steps with your lenders. To avoid overlooking a crucial detail, remember to touch on these key points.
- Do you lend to cannabis-related businesses? First things first, you’ll need to make sure that they are willing to provide financial resources to a company that operates in a high-risk industry.
- What are my funding options? You should explore several MRB lending opportunities and choose the one that fits the type of your business (dispensary, manufacturer, distributor, etc.), the amount and term of your loan, and other factors.
- How fast can I receive the funds? Sometimes, entrepreneurs may need a very expedient loan approval (for example, to urgently boost production and meet client requirements on time). See if your potential lender can meet your expectations.
- Does your loan term fit my business? After you’ve decided whether you require a short or long-term loan, check if the lender is able to supply you with your preferred option.
- What’s the interest rate and overall cost? Try comparing several options to see which one is the most affordable. The total price is an essential factor in determining how much the loan will pay off in the long run.
- What are my payments due? Determine what your payment schedule will be like and whether this matches your profit inflow (for example, if your earnings are pretty steady each month, regular monthly installments would probably be the most feasible option for you).
- What should I provide on my end? Although you’re operating in an unconventional field, MRBs apply for loans in much the same way as businesses in other industries. You will need to submit your credit risk report, bank statements and other financial documents, certificates, list of managers, and other records your lender may ask for.
How do I find one of the best cannabis lending companies?
Handle the challenges of running a cannabis business by partnering up with Confia. We are a forward-thinking team committed to providing practical and innovative financial services. We assist dispensaries and other companies in the cannabis supply chain, making it possible for them to manage their finances in an intuitive way.
With us as your ally, you will receive easy access to reliable funding and streamlined banking. Finding a suitable financing option in a high-risk industry can be challenging, but we can secure it for you. You can expect efficient funding solutions, prompt diligence, meticulous pre-approval, and low-cost services. We’ll also make sure that every aspect of your finances stays compliant with relevant regulations.
Get in touch with us today to set your business up for success.